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MINISTER OF PUBLIC WORKS REPUBLIC OF SOUTH AFRICA

Department of Public Works

LEKGOTLA

Strategic Planning Workshop

18 – 19 November 2013 St George Hotel, Irene

Keynote Address: Minister TW Nxesi

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PROTOCOL and welcome.

Colleagues welcome all. It is fitting that this Lekgotla

takes place in this venue. This is where it all started for

me. This is where I attended my first strategic planning

session with DPW officials – only a few weeks after I

was appointed.

It has been a steep learning curve – made easier by

the support and knowledge of the many hard-working

committed officials in this Department.

In the time available I intend to cover the following:

Setting key focus areas for the next MTSF

(Medium Term Strategic Framework) – indeed

this is listed as the main input from the Minister

and the DM in the Lekgotla Programme

Then I want to spend some time discussing

what we as a Department need to do in order to

deliver on those MTSF priorities

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Of necessity this will require that we analyse

where we are coming from, the progress we

have made in terms of the turnaround strategy,

the challenges that remain – and above all the

vision and objectives we set for ourselves.

Medium Term Strategic Framework 2014-2019

The Cabinet Lekgotla which took place in August this

year spent a lot of time reflecting on the whole

outcomes based planning process for the next MTEF.

It was very clear that the approach is one of greater

integration of the different elements of planning. This

would include the following:

In the new MTSF we have to ensure all plans are

aligned to the NDP (National Development Plan).

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Indeed the MTSF will form the first 5 year building

block of the NDP.

In the departments of government, we have to

ensure that departmental StratPlans and APPs

(Annual Performance Plans) align with the MTSF –

which process is to take place up to early 2014.

Departments will be required to report against their

Stratplans/APPs – which by definition will include

departmental commitments to the outcomes listed in

the MTSF. (By the way, the number of outcomes

goes from 12 to14.)

After the 2014 elections – new Performance

Agreements between President and ministers will be

based on MTSF targets/indicators.

Draft chapters of the MTSF are being circulated –

and it therefore becomes important that ministers

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and DGs engage with the sections relevant to their

departments in the coming months.

The exciting part about this is that the goal is to have

the new MTSF ready for consideration by Cabinet

immediately after the 2014 elections. Instead of

spending the first few months working on the MTSF,

the new Administration will hit the road running. We will

be able to say that we have done the planning – and

the focus then becomes immediate implementation

and delivery.

This is why I say we can be excited. We have an

Executive which is thinking and planning ahead – for

future success. As DPW we are a part of that process

– and this Lekgotla feeds in to a grand plan and road

map which takes us to 2019, and beyond.

On a lighter note – maybe I should rephrase: instead of

saying ‘we can be excited’ I should have said: ‘you can

be excited’ – because of course there is no guarantee

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that the DM and myself will be a part of this process

after the elections.

Let me briefly list the envisaged 14 outcomes. Whilst

we contribute in some way to all of these outcomes, I

will just flag where Public Works has a very specific

contribution to make:

Outcome 1: Quality basic education

SIP 13 and the school building programme – working

with and through IDT

Outcome 2: A long and healthy life for all South

Africans

Construction of health infrastructure – part of the

mandate of this Department and IDT to deliver social

infrastructure.

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Outcome 3: All people in SA are and feel safe

Again provision of infrastructure to the justice and

security cluster.

Outcome 4: Decent employment through inclusive

growth

This includes a commitment to ‘expanding public

employment schemes’ – to empower communities

and youth.

Outcome 5: Skilled and capable workforce to

support inclusive growth path

We have made a commitment to rebuild the

technical and professional capacity of Public Works

– and to contribute to the country’s skills

development programme particularly in relation to

the built environment.

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Outcome 6: An efficient, competitive and

responsive economic infrastructure network

There is a reference to the fact that ‘maintenance

programmes are lagging’ – in regard to public

infrastructure.

Two things are happening – infrastructure is

degrading and we are losing capacity to undertake

normal planned maintenance – in relation to state

assets.

We also need to ensure the maintenance of new

infrastructure, which also requires training people to

do the work.

NIMS – National Infrastructure Maintenance Strategy

– approved by Cabinet for implementation by DPW

is very important therefore – to maintain state

assets; retain value; and train skilled maintenance

operatives.

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Outcome 7: Comprehensive Rural Development

As DPW we have been discussing the need for a

programme of regenerating small towns. This is a

conversation that needs to be broadened to include

Rural Development and other relevant departments.

Outcome 8: Department of Human Settlements

In order to achieve adequate housing and improved

quality of living environments, the call has been

made to fast-track the release of well-located land

for housing and human settlements targeting poor

households. Clearly DPW has a role here.

Outcome 9: Responsive, accountable, effective and

efficient developmental local government system

One of the sub-outcomes calls for local public

employment programmes to be expanded to improve

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services. I know that this is an area that EPWP is

focusing on currently.

Outcome 10: Protect and enhance our

environmental assets and natural resources

The objective is to ensure that ecosystems are

sustained and natural resources are used efficiently.

Again EPWP is already involved here – and this is

an area where the DM is particularly involved and

may wish to say more at a later stage.

Outcome 11: Creating a better South Africa and

contributing to a better and safer Africa in a better

world

Outcome 12: An efficient, effective and

development orientated public service

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Outcome 13: An inclusive and responsive social

protection system

A key element of this is income support for the

working-age poor through public works programmes.

Outcome 14: Transforming society and uniting the

country

We are going to have to think creatively about this

one, but the elements are already there:

o Our mandate includes to transform the

construction and property sectors

o We have a role to play in relation to land reform

and the land question.

o In relation to spatial planning – we have a

critical contribution to make in transforming

inherited apartheid spatial planning – uniting the

country spatially if you like.

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The Cabinet Lekgotla also reflected on progress

made against SONA (State of the National Address)

commitments:

Just to flag some of the commitments relevant to DPW:

The fight against corruption, tender fraud and price

fixing in infrastructure programmes

Job creation and economic growth – particularly to

address youth unemployment

Eradication of mud schools

Payment of suppliers within 30 days

We have made progress on these commitments – but

not as much as we would have hoped in some cases.

It has also exposed weaknesses – such as the lack of

capacity to manage infrastructure projects – eg the

schools building programme.

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In order to avoid making commitments which are not

met, in future, Cabinet has said that ministers should

only recommend commitments for SONA which are

already planned and budgeted and contained in APPs.

The Turnaround: Rebuilding Public Works

Let me turn to look at where we are coming from.

When I announced the Turnaround Strategy at the end

of January 2012, I made the point that ‘turnaround was

a process, not an event.’ How true that was.

Back then, quite honestly, I had only a vague sense of

the enormity and complexity of the process we had

embarked upon. The size of the turnaround project

clarified only later as we learned more. Indeed, by the

second half of 2012 we were talking about a Seven

Year Plan – working closely with National Treasury to

develop the plan. In fact at that stage we no longer

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talked about ‘turnaround’ - rather, we now talk about

‘Rebuilding Public Works’.

By the way, I need to be assured that the 7 Year Plan

has been finalised and signed off with National

Treasury.

So, what does it mean: ‘rebuilding Public Works’? In

other words: what is it we are seeking to do, and why?

First, it requires that we clarify our mandate and core

business as Public Works. Basically:

o DPW is the custodian and manager of state

immoveable assets – including the provision of

accommodation to government departments

and entities. This involves a number of major

sub-functions:

Asset investment management – from

acquisition to disposal

Property, facilities and lease management,

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And construction project management.

This is the core business and service that DPW

provides allowing all other departments and

branches of government to do their work.

o DPW is also mandated to develop policy,

regulate, and transform the construction and

property sectors. This we do together with our

entities that report to Public Works.

o Of growing importance, DPW also coordinates

the government’s Expanded Public Works

Programme – which helps provide a social

security safety net, work opportunities to

mitigate unemployment and promotes skills

development.

Secondly, we have to interrogate the current way we

do business:

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o To check that we are actually achieving in terms

of our mandate, and

o To see where we can improve performance so

that we better service our clients. And this is a

crucial point: ultimately it is the clients who will

decide whether Public Works is delivering. And

as we have seen - they will vote with their feet.

Third, we have to do all this with a clear focus on our

deliverables in terms of the MTSF and the NDP.

Turnaround: Guiding Principles

Remember when we embarked on this turnaround

journey we said that there would be different phases:

Immediate stabilisation

Implementation of new structures and systems for

business improvement

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And long-term growth and sustainability - a phase of

continuous improvement.

But we also said there was no Chinese Wall between

the phases. Basically, we had to stop the bleeding, but

start planning and taking decisions for longer term

improvement and transformation.

That has been the approach and we have made real

gains – improved audit findings and our improved

standing with parliamentary committees reflects this.

But gains have been uneven – and not as much as we

would have liked. But that is the real world of

constraints and blockages. That is the challenge of

trying to make changes whilst simultaneously keeping

the business going.

In the rest of the time available to me I am going to

suggest, that as you plan strategically over the next

two days, you bear in mind the following

considerations:

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That, over the next 4 – 6 months, we need to

consolidate what has been achieved thus far;

That we will be guided in our planning by

government priorities; and

Over the next MTSF we need to continue to:

o Interrogate business processes

o Implement improvements, and

o Lay a solid foundation for the transformation

and sustainable growth of Public Works in the

long term.

From Stabilisation to Consolidation

Our broader vision for rebuilding Public Works can only

be realised if we put our house in order. We have to

keep up the momentum to address the systemic – as

well as basic house-keeping - problems that we

identified in the Turnaround Document almost two

years ago.

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You remember at the time we said that DPW was like a

patient in the ICU. Today, there can be no doubt that

the patient has been stabilised and the prognosis is

much improved. Most important, the patient has woken

up from a coma induced by lack of stable leadership, a

sense of fatalism that nothing would change, in some

cases denialism as to whether indeed there was a

problem, and a general absence of mechanisms for

accountability.

That mood has definitely changed. I see many

committed officials grappling with the challenges –

incrementally making improvements; turning the

corner. If I were an American politician I would be

tempted to say there is now a sense of: “Yes we can.”

So it is right that we congratulate each other when we

do well: DG, CFO and A/DDG: AIM and your teams –

thank you again for the improved audit outcomes in the

last financial year.

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But we dare not be complacent – and I will highlight

some of the risks later.

Some of you have deadlines for the end of this

financial year: especially for the clean audit project, the

Immoveable Assets Register and in relation to leases.

Effectively, you have less than 4 months. Make every

day count – and if you are encountering blockages

raise it with your principal and if necessary escalate it

to the DG.

For the rest of the Department, you probably have

around 6 months until the new Administration is in

place. Make every day count. Imagine the collective

pride and relief we will feel if we can be able to present

the new Administration with a DPW which is:

Measurably improved;

Where we have addressed the basics; and

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Where the building blocks are in place to deliver on

the next MTSF commitments and to carry forward

the 7 Year Plan for rebuilding Public Works.

I see this period – until the new Administration after the

2014 elections – as a time to focus our efforts on

consolidating the initiatives we have started in the last

1 to 2 years. You know what these are:

The Clean Audit project;

A reliable register of state assets – the basic tool

of our core business; and key to a clean audit;

The Review of all leases – and implementation of a

professional lease management system – so that the

Head of PMTE does not have to run round the

country putting out fires, and the DG can sleep at

night without having to worry that another major

client is about to be evicted.

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The PMTE itself – we need to see the interim

solution bedded down – fully operationalised and

staffed; and with clear progress towards the end plan

of a government component. And here I want to

raise concerns. My information is that:

o We have not staffed the PMTE adequately –

there are outstanding appointments which need

to be finalised;

o The PMTE is not yet meeting and cohering as a

separate unit; and

o We have not signed off on the interim solution,

in terms of providing the necessary delegations.

To all those concerned – please tell me I am wrong,

and you have this matter in hand. I don’t need to

remind you that the PMTE is at the heart of the

business of this department – and is central to any

successful turnaround and moving away from the

disclaimer.

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In the Projects environment – and this goes for

PMTE – we need to see the client-orientated

strategy consolidated - with joint teams up and

working for – and with - all the major clients.

I relation to projects, we need that overall planning

and monitoring function – an implementation-

oriented PMO – in place in the DG’s office, ASAP:

o With line of sight across all projects;

o able to identify and address blockages; and

o able to coordinate all the support functions

along a critical path to speed up delivery – and

to move beyond the present chaos – a kind of

relay race where the different branches point

fingers at each other. We need coordinated

planning and clear accountability.

One other issue for Projects, in our discussions in

Mintop, there were references to old projects

which had stalled – where even the client had

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forgotten about them. This sounds like another

can of worms about to be opened.

We will need a status report which identifies these

projects and spells out the options for ourselves

and for clients – so that we get these projects

signed off or cancelled.

IT – I know that the DG has been encouraged with

work currently going on in the IT environment to

improve efficiency and controls. In the current

information technology era, no business can survive

– let alone grow – without an appropriate and robust

IT platform. If we can embrace this thinking we can

radically increase the quality and speed of service to

clients.

We need to implement a practical IT plan that builds

on what we already have – but have never fully

utilised – whilst focusing on supporting the changing

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requirements of the various business processes of

Public Works.

Structure – by the time we hand over to the new

Administration – we must have moved decisively

towards implementing a structure for DPW – which

actually reflects its mandate and core business. This

is key to the second phase of the Turnaround:

improving the business of DPW.

Structure continued:

Let me summarise some of the decisions we have

already made:

We have said we will review SCM processes with a

view to establishing a dedicated branch (Remember

procurement is the majority of the business of DPW

as things stand.)

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We are committed to put in place a separate and

enhanced Governance Risk and Compliance Branch

- to fundamentally address issues of fraud and

corruption, as well as the broader risks in our

business environment. This needs to be bedded

down.

We have argued for a separate Professional

Services branch to rebuild the professional and

technical skills needed to run DPW and to equip a

developmental state.

In line with Cabinet and National Treasury decisions

of 2005/6, we have to operationalize the PMTE.

Crucially this involves a major enhancement of the

roles of AIM (Asset Investment Management), IAR

(Immoveable Asset Register), and Facilities

Management and Property Management (including

leases).

Principles underlying the structure

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We have also spoken about needing to change the

way in which we do business and some of the

underlying guidelines and principles which should

guide the development of the business model of DPW.

These include:

Client-centred service – so we have put in place the

joint professional teams and encourage engagement

with clients – so that as DPW:

o we know what the client wants, and

o that is what we have to deliver on, and

o the client knows what is going on and is fully

participating in the processes.

So for example, instead of complaining that the client

hasn’t completed their User-AMPs, we walk them

through the process – so we are all on board; we

provide a service to the client; and it makes our job

easier. A win-win situation.

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Coordinated/integrated approach to delivery –

o We stop working in silos

o We stop pointing fingers

o We plan together, and

o most important, we have to have clear and

direct lines of accountability – with

consequences - and this is what drives delivery.

On Regions – we have to clarify our thinking on this.

We have said:

o As DPW nationally we set policy, we plan and

decide centrally, but the majority of

implementation takes place in the regions – and

the regions do not have capacity.

o We have also said that we need direct lines of

accountability across the whole value chain, so

that, for example, Project Managers have a

clear line of sight across individual projects –

and their job is to:

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drive that project to be on time and on

budget, and

to coordinate the inputs of the other support

functions.

A word of caution here: this is not a simple question of

‘centralisation versus decentralisation’. The new

structure actually calls for both – in different ways:

Centrally (National Office):

o A beefed up AIM taking the investment

decisions – with clients – to drive the

business, and

o Drawing on a pool of talent to staff client-

oriented Portfolio Management Teams with

lines of accountability straight down to the

point of implementation – wherever that

might be.

The crucial point here is that you cannot claim

to be a manager in the national office – taking

the decisions, issuing instructions - and at the

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same time you have no responsibility in

regard to implementation on the ground. It is

that disjuncture that lies at the heart of

delivery problems in DPW.

At local level (regions) – they need to be

capacitated to monitor and quality assure the

implementing agents or contractors.

This points to a flatter structure:

To shorten lines of communication and speed up

delivery between national office and regions, and

A structure in which the regions are capacitated,

but driven by the policy and investment decisions

taken centrally.

We need to engage and clarify these ideas - both in

terms of the business process, and the structure that

would be necessary to deliver it.

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There is a process in place – under the DG, led by

A/DDG: Corporate Services. Participate. No one has

anything to fear. This is the Public Service – no one will

lose their job or be down-graded. But equally, this is

not about anybody’s turf. It is about aligning structure,

mandate and business processes – to improve delivery

to the client. And to move DPW in this direction we can

have no sacred cows.

One final concern I have, is that we are not sufficiently

– on a day by day basis – communicating the message

of the turnaround. You know the risks: false rumours

start and then people start to feel insecure. This

speaks to the whole issue of change management.

We need to address this as a matter of urgency.

Indeed, the DM and I will be embarking on regional

roadshows from this week to get the message out, to

engage with all staff, and to address any questions

they may have.

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The Big Picture: Priorities for MTSF 2014-19

I have taken a long – but necessary - detour before

getting back to focus on the next MTSF. Basically, I am

saying that we will only deliver optimally on the

government’s priorities for the next MTSF – and I

touched on these at the beginning of my input – we will

only deliver if we improve the way we do business as

DPW.

For the details, refer to the 7 Year Plan, but let me list

– what to me – are the main priorities for the next

MTSF period:

Structure and Organogram – embedding the new

structure of DPW – some of the features and issues I

have already discussed in this respect. But let me

stress again:

o IT

o The relationship with regions

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o And let me add the need for sound HR planning

and practices.

PMTE – the aim of a government component in

place; crucially providing professional property

management services to government:

o A reliable comprehensive register

o A professionally staffed AIM driving policy and

investment decisions in the interests of our

clients

o Creating value and contributing to economic

development and job creation

o Contributing to spatial planning and

transformation

o Professional property, facilities and lease

management

o A smoothly running Prestige (again, allowing the

DG and the Minister to sleep at night.)

Policy Branch – a greatly capacitated and

empowered Policy and Regulation Branch:

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o developing policy, regulation and legislation

reflecting best practice for the built environment,

eg in relation to empowerment and labour

practices and skills development;

o actively leading the process of transformation in

the construction and property sectors;

o leading and setting standards for access,

greening and sustainability.

Professional services – rebuilding the core

professional and technical capacity of DPW,

including:

o Joint teams – to better service clients

o Reviving Workshops

o Implementing NIMS, and

o A proactive skills development policy and

system to produce our own technical, artisan

and professional staff.

Construction Projects – driven by an integrated

and robust planning system and coordinating

machinery which will also make possible:

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o A greater degree of accountability built into the

system;

o A much speedier throughput time for projects –

whilst maintaining quality and within budget; and

o Also enabling us to budget realistically – and to

spend that budget;

EPWP – larger, smarter, innovative, re-invigorated,

more integrated across the tiers of government –

‘EPWP on steroids’:

o Qualitative changes which focus on improved

services and infrastructure particularly in poor

communities;

o Addressing issues of the green economy and

sustainability

o And with every indication that we will get the

political support to ensure that all government

departments and entities across the tiers will be

brought to the party.

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In closing, at a previous Lekgotla I quoted from Martin

Luther King’s – “I have a dream”. Well this may seem

like a dream right now, but I believe it is doable. To

quote another American politician: “Yes we can.”

I thank you.